Pennsylvania, Ohio and West Virginia engaged in a tax competition for the plant. In 2012, Pennsylvania structured a deal requiring Shell to invest at least $1 billion in Pennsylvania and create at least 2,500 construction jobs in exchange for a 25-year tax incentive of $66 million per year and tied to production, reducing Shell's tax by up to 20 per cent. The combined incentive could reach $1.65 billion.[5][6] Shell announced the Pennsylvania site on March 15, 2012.[7] The deal was one of the largest tax incentives in Pennsylvania's history.[1]
Shell began leasing the bulk of the property from Horsehead in 2012, which promptly closed the zinc plant on the site and began cleanup of the site in preparation of potentially opening a cracker plant on the site, which would be used to convert natural gas products into ethylene and then into plastics.[2][8] Shell had selected the site due to the ongoing Marcellus natural gas trend and the site's prime location within the Marcellus Shale.[1] By 2015, after executing several short-term lease extensions, Shell purchased the property outright from Horsehead, and subsequently purchasing other nearby properties, effectively absorbing all of Kobuta.[9][10]
Shell pledged with Beaver County officials on environmental cleanup regardless if it opened the proposed plant, and in a worst-case scenario prepare the area land for at least some sort of future industrial use if Shell decided not to build there. This included building a massive bridge over PA 18, commenced in 2015,[11] to connect both sides of the property without requiring an intersection along the route, as well as a Shell-funded rerouting of PA 18 and infrastructure improvements to I-376. Shell also gave a donation to the Beaver County recycling center so the center could extend its operating hours.[1]
Despite a downturn in oil prices, on June 7, 2016, Shell announced it would build the plant.[3][5] In a press release, Shell stated that 70% of polyethylene customers in North America are within a 700-mile (1,100 km) radius of Pittsburgh and that the location would be more cost-effective for its customers than at existing facilities along the Gulf Coast, which unlike North Central Appalachia are susceptible to the Atlantic hurricane season.[2]
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